Even if peace deal holds, freight and logistics industry set for permanent change in the Gulf

The news that one of the world’s biggest ocean shipping lines is planning to invest $400 million with a local partner, Asyad Group, in a multipurpose logistics terminal at the Port of Sohar in Oman can perhaps be interpreted as further evidence that, even if the uneasy ceasefire between the United States and Iran holds, the Strait of Hormuz will remain a high-risk trade route—and, where possible, one to avoid.

Situated outside the Strait, Sohar is described by its management company, Sohar Industrial Port Company (SIPC)—a 50:50 joint venture between Asyad Group and the Port of Rotterdam—as one of the world’s fastest-growing port and free-zone developments, located at the heart of global trade routes connecting Europe and Asia.

Commenting on the strategic partnership with Asyad, Rodolphe Saadé, Chairman and CEO of the CMA CGM Group, said it marked “an important step in the development of our logistics and port activities in the Gulf.

“By developing a new logistics terminal at Sohar, we will strengthen regional connectivity while securing reliable inland access to key trade corridors. It will ensure greater resilience and efficiency for our customers’ supply chains. It also reflects our confidence in Oman’s long-term vision and our commitment to strengthening its position as a strategic gateway connecting the Gulf to global markets.”

Unwillingness to expose supply chains

In Ti Insight’s latest Gulf Logistics Monitor, John Manners-Bell, founder and CEO of the UK-based market research company specialising in the transport and logistics industry, noted that, even if the ceasefire agreement holds, the freight transport and logistics industry in the Gulf is set to undergo permanent change.

“In the future, the governments in the region, exporters, importers and shipping companies will be unwilling to expose their supply chains to the risks presented by the Strait of Hormuz.

“The new land-based structures which have emerged will continue to play an important role in supplying the Gulf, and new oil pipelines will be built, bypassing the bottleneck. The region has learnt the hard way that ensuring resilient supply chains may cost more in the short term, but that the risks of complacency are even higher.”

Plan Bs and backup alternatives

Lessening dependence on Hormuz has become a key concern for freight transport and logistics players and is set to remain so for the foreseeable future.

Fresh attacks by Iran on Bahrain and Kuwait last weekend, followed by assertions from the Islamic Revolutionary Guard Corps that it would control the passage of ships through the Strait, have simply reinforced the view that Plan B options, or backup alternatives to the waterway, are vital.

What the past four months or so have clearly shown is that the freight transport and logistics industry is extremely creative, agile, flexible and wired to accommodate change. Rather than wait for a political solution to bring the hostilities to an end, it has adapted to the prevailing conditions from Day 1 of the conflict, evaluated the dangers posed and met the challenges faced head-on.

The rapid-response capability that enabled Oman’s Port of Sohar to accommodate far greater tonnages than it was accustomed to handling when neighbouring ports were cut off has also been ably demonstrated at Saudi Arabia’s Red Sea ports—Jeddah, King Abdullah and Yanbu—as well as the Port of Neom.

These gateways have emerged as workable alternatives to Hormuz-dependent ports in the Persian Gulf, absorbing significant cargo volumes and keeping supply chains moving.

In May, one of CMA CGM’s chief rivals, Switzerland-based MSC, launched a Europe-to-Gulf multimodal route via Saudi Arabia to bypass Hormuz. The service calls at Jeddah and King Abdullah Port before cargo is moved by truck across the Kingdom to King Abdulaziz Port in Dammam for onward distribution to Arabian Gulf ports.

This shift has accelerated investment, capacity expansion and operational improvements at the Kingdom’s western ports in ways that may permanently reshape the Gulf Cooperation Council’s (GCC) trade patterns, according to regional logistics services provider Dubai Cargos.

Jeddah, already Saudi Arabia’s largest seaport, has reported a significant increase in throughput in 2026. The Saudi Ports Authority, Mawani, has responded with accelerated berth-expansion projects originally scheduled for the longer term; extended operating hours and additional shift workers to handle growing traffic volumes; priority customs-clearance lanes for time-sensitive cargo; and investment in additional container-handling equipment.

King Abdullah Port, near Rabigh and operated by a private consortium, has positioned itself as a flexible alternative for shippers seeking to avoid both Hormuz-related delays and Jeddah’s increased congestion.

The port’s relatively new infrastructure and historically lower utilisation provide scope for it to offer spare capacity and absorb diverted cargo more easily than the more established Jeddah gateway, making it an increasingly popular choice for businesses seeking reliable Red Sea access.

Shift to outlast Hormuz crisis

The growth of Saudi Red Sea ports could have important implications for Dubai-based cargo businesses. While road freight from Dubai to Jeddah already serves western Saudi Arabia directly without any port dependency, enterprises with ocean freight destined for European or Mediterranean markets via Saudi transhipment may find improved options through expanded Red Sea port capacity, Dubai Cargos observed.

A central question for long-term GCC trade planning is whether the capacity and investment improvements at Saudi Red Sea ports will persist after Hormuz fully normalises.

Industry analysts suggest that a partial structural shift is likely. The infrastructure investments being made now—including berth expansions, equipment and operational improvements—will remain in place, giving Saudi Arabia genuinely improved Red Sea port capacity over the long term, even if cargo volumes partially shift back to Gulf-side ports once shipping routes through Hormuz fully resume.

This represents one of the few potentially positive long-term legacies of an otherwise costly and disruptive 2026 crisis.

‘Paying a price for uncertainty’

Meanwhile, in an industry review recently covered by The Wall Street Journal, Thomas Lillelund, CEO of insurer Allianz Commercial, said the shipping industry has gone from decades of relative stability, with steady trade flows and largely predictable operating conditions, to becoming increasingly complex and volatile.

“The Middle East conflict and Strait of Hormuz closure is just the latest in a series of severe interruptions to hit shipowners and cargo operators,” he noted. “Resilience, geopolitics, and efficiency must be balanced in an increasingly unpredictable world, where the cost of uncertainty is reshaping the shipping industry.”

His comments were echoed by Captain Rahul Khanna, global head of marine risk consulting at Allianz Commercial, who said the closure of the Strait of Hormuz set a dangerous precedent and raised questions about the long-term future of this and other critical chokepoints.

“What is becoming clear is that we have to pay a price for uncertainty, shifting from ‘just-in-time’ to ‘just-in-case’ supply chains, and prioritising resilience over cost efficiency.”